Director’s liabilities

As a company director, you have statutory obligations to ensure your company does not engage in insolvent trading. Trading while insolvent occurs
if you are unable to pay debts when they are due. To incur debt which you know you will not be able to pay is illegal in Australia. Company
directors may be personally liable for their company’s debts if they are in breach of these provisions.

You need to know how to protect yourself, your personal assets, and your company. As a director, you do have statutory defences against actions
brought by liquidators for recovery of transactions made while your company is alleged to be trading whilst insolvent.

In cases of insolvent trading, it is important to act quickly. To fail to act can expose you and your business to criminal charges. A number of
other pieces of legislation can also potentially lead to penalties and liability falling upon a director.

Your Streeterlaw insolvency lawyers can assist you, as a director, to structure your affairs to ensure any loans you make back to the company are
secured.